How adverse credit mortgages are helping first time buyers

Monday, 22nd May, 2017
Adverse credit mortgages

For those of you that keep up to date with Complete Mortgages’ articles, news and views, you’ll know that we have been proactive in ‘rebranding’ the adverse credit mortgage or, as it was more widely known, the sub prime mortgage.

Importantly, this is not because Complete Mortgages is an irresponsible Guildford mortgage broker. Nor is it because we refuse to accept its role in the 2007/8 financial crisis (unregulated sub prime mortgage lending was undeniably an instrumental factor).

Our reason for supporting the new wave of adverse mortgage lending is twofold. Firstly, lending of this nature no longer represents the sub prime lending of pre-2008, as you can read here. Secondly, it is increasingly becoming a way in which young first time buyers can successfully apply for a mortgage and therefore access the property ladder.

Around this time last year a TransUnion survey revealed that millennials are highly likely to have a bad credit or subprime credit rating, which limits their access to loans and, of course, mortgages. A recent article in the Telegraph also supports this by including ONS figures that suggest that almost 100,000 millennials who live with their parents believe that they will never move out.

This is a particularly disheartening scenario and one that, in many cases, stems from high student loans and the rising cost of living. Unfortunately, this can often lead to overdependence on credit, which, if not managed, can result in a bad credit rating.

The cycle is clear. The question now is how do we break it, or at least how do we help young first time buyers shortcut it? And that’s where the new wave of adverse credit mortgage comes into play.

Thankfully, first time buyers are now able to access up to 85% loan to value mortgages at 4.5 times their income with non-high street lenders.

Of course – and as pointed out in a previous Complete Mortgages article on sub-prime mortgages – there needs to be evidence that those applying for an adverse credit mortgage can make the required repayments. Likewise, applicants will need to apply for a mortgage in the knowledge that they will be paying more for the privilege.

However, when faced with living with your parents well into your thirties, a situation that is only compounded (and arguably prolonged) by escalating house prices, the modern day sub prime mortgage could prove to be a helpful springboard for many young people.

Regardless of situation and credit score, I would recommend those who think an adverse credit mortgage could be a viable route for them to get in touch with me or a member of the Complete Mortgages team to discuss their options.

To speak with a credit repair mortgage specialist contact Mark Lucas on 01483 238280 or email lucas@complete-mortgages.co.uk. Complete Mortgages also specialises in commercial mortgages, buy to let mortgages and limited company but to let mortgages.

By Mark Lucas, credit repair mortgage specialist at Complete Mortgages


Complete Mortgages launch subprime mortgage service

Friday, 17th June, 2016
debt management plan

Guildford mortgage broker, Complete Mortgages, has vowed to demonstrate how ‘subprime’ is no longer a dirty word following the launch of its latest offering – a subprime mortgage brokerage service.

The mortgage and insurance brokerage, which launched in 2005, has introduced the sub-prime lending service in conjunction with the appointment of sub-prime mortgage specialist, Mark Lucas (pictured above), who joined the rapidly growing firm on 1 June.

Unlike the pre-crash sub prime lending of the mid-2000s, sub prime mortgage lending of today is no longer based on granting loans to those who simply claim to be able to afford mortgage repayments.

Applying for a sub-prime mortgage is now a more thorough process, in which lenders insist that that applicants can only apply if their adverse credit rating and poor credit score is a result of an ‘unexpected event’ such as divorce or business failure.

On joining Complete Mortgages and spearheading its subprime mortgage offering, Mark Lucas comments: “This is a great opportunity on two levels. Firstly, I’m looking forward to a new challenge and establishing Complete Mortgages within a new market segment. Secondly, I’m looking forward to help change perceptions of sub prime home loans and communicate how they now operate within a much tighter framework and are subject to greater levels of scrutiny.”

The brokerage claims that unlike the prime market, whereby computers often make key decisions, brokers providing subprime mortgages can spend time understanding an individual’s circumstances and evaluate reasons for poor credit scores before making a decision.

Mark Finnegan, Director at Complete Mortgages, adds: “We’re delighted to welcome Mark to Complete Mortgages and have no doubt that he will be a great asset to the team. There is understandably still a stigma attached to the subprime mortgage market following the most recent financial crisis. However the financial services industry has never been more stringent when it comes to deciding what products can and cannot enter the market. Moreover, those who are now classed as having an adverse credit score or a poor credit history through no fault of their own should not be blocked from homeownership. Our latest service aims to make mortgages accessible to those who, for many years now, have been effectively locked out of the market.”

For more information on Complete Mortgages’ sub prime mortgage service or to apply for a subprime mortgage contact 01483 238280 or email info@completemortgages.co.uk.